Turkey Reportedly Asking Banks to Limit Purchases of Foreign Currency

Turkey’s central bank is reportedly taking measures to protect the value of the country’s currency.

The measures include asking banks to limit the amount of foreign currency they buy each day, Bloomberg reported Monday (April 17), citing unnamed sources.

As a result, the lenders — who would be exposed if the demand from investors for foreign currencies far exceeded the banks’ daily limits — have been widening their spreads between bid and ask prices for foreign currencies in order to reduce demand for the currencies, according to the report.

At the same time, the enforcement of the daily limits suggested to the banks has not been consistent and the central bank has eased other measures to protect the lira, such as requiring reports of customers’ purchases of dollars, restricting trading hours and imposing higher rates for retail investors, the report said.

The value of the lira has become more volatile ahead of elections May 14. President Recep Tayyip Erdogan is seeking another five-year term.

In other recent news from the region, FinTech companies have reported that they see significant opportunities for growth in Turkey.

For example, Istanbul-based FinTech Sipay is offering a single application programming interface (API) point of sale (POS) solution that helps the country’s merchants offer installment loyalty programs without having to get POS systems from multiple banks.

The payments company also offers a white-label digital wallet solution that enables retail brands to access services from multiple banks in a single app, whether comparing microcredit offers or applying for a credit card, Sipay Founder and CEO Nezih Sipahioglu told PYMNTS in an interview posted April 13.

The opportunity for digital goods and services sales in Turkey “can’t be overstated,” Worldline Head of Digital Goods and Services Michael Bilotta told PYMNTS’ Karen Webster in an interview posted April 3.

“The consumers are guiding the market to a large extent,” Bilotta said. “What you see is that because it’s a young population, they’re becoming more and more sophisticated. They’re the ones that are starting to guide this.”